The sequester, explained
Posted by Suzy Khimm
on September 14, 2012 at 2:35 pm

The White House has released its plan explaining how the sequester’s mandatory spending cuts to defense and domestic spending will be implemented in 2013. Here’s the background on what the sequester is, how it happened and what happens from here:

What is the sequester?

It’s a package of automatic spending cuts that’s part of the Budget Control Act (BCA), which was passed in August 2011. The cuts, which are projected to total $1.2 trillion, are scheduled to begin in 2013 and end in 2021, evenly divided over the nine-year period. The cuts are also evenly split between defense spending — with spending on wars exempt — and discretionary domestic spending, which exempts most spending on entitlements like Social Security and Medicaid, as the Bipartisan Policy Center explains. The total cuts for 2013 will be $109 billion, according to the new White House report.

Under the BCA, the cuts were triggered to take effect beginning Jan. 1 if the supercommittee didn’t to agree to a $1.2 trillion deficit-reduction package by Nov. 23, 2011. The group failed to reach a deal, so the sequester was triggered.

Why does everyone hate the sequester so much?

Legislators don’t have any discretion with the across-the-board cuts: They are intended to hit all affected programs equally, though the cuts to individual areas will range from 7.6 percent to 9.6 percent (and 2 percent to Medicare providers). The indiscriminate pain is meant to pressure legislators into making a budget deal to avoid the cuts.

How would these cuts affect the country?

Since the details just came out, it’s not entirely clear yet. But many top defense officials have warned that the cuts will lead the military to be “hollowed out.” Democratic legislators have similarly warned about the impact on vital social programs. And defense, health care and other industries that are significantly dependent on federal spending say that major job losses will happen if the cuts end up taking effect.

At the same time, if legislators try to avoid the sequester without replacing it with real deficit reduction, the U.S. could face another credit downgrade.

Why did Congress and the White House agree to the sequester in the first place?

The government was approaching its debt limit, which needed to be raised through a congressional vote or else the country would default in early August 2011. While Democrats were in favor of a “clean” vote without strings attached, Republicans were demanding substantial cuts in exchange for raising the debt limit.

President Obama and congressional leaders ultimately agreed to the BCA, which would allow the debt ceiling to be raised by $2.1 trillion in exchange for the establishment of the supercommittee tied to the fall-back sequester, as the Center for Budget and Policy Priorities explains. The deal also includes mandatory spending reductions on top of the sequester by putting caps on non-entitlement discretionary spending that will reduce funding by $1 trillion by 2021.

Who supported the debt-ceiling deal?

Party leaders, the White House and most members of Congress supported the debt-ceiling deal: The BCA passed on a 268-161 vote in the House, with about one-third of House Republicans and half of House Democrats opposing it. It passed in the Senate, 74-26, with six Democratic senators and 19 Republican senators opposing it.

Can the sequester be avoided?

Yes, but only if Congress passes another budget deal that would achieve at least $1.2 trillion in deficit reduction. Both Democrats and Republicans have offered proposals to do so, but there still isn’t much progress on a deal. The political obstacles are the same as during the supercommittee negotiations: Republicans don’t want to raise taxes to generate revenue, while Democrats are reluctant to make dramatic changes to entitlement programs to achieve savings.

What happens from here?

No one on Capitol Hill thinks any deal will happen before Election Day. After Nov. 6, Congress will have just a few weeks to come up with an alternative to the sequester. The challenge is complicated by the fact that the Bush tax cuts, the payroll tax, unemployment benefits and a host of other tax breaks are all scheduled to expire Dec. 31. The cumulative impact of all of these scheduled cuts and changes is what’s popularly known as the fiscal cliff. There’s already talk of passing a short-term stopgap budget plan during the lame-duck session to buy legislators more time to come up with a grand bargain.

And Republicans got two times the amount of budget cuts as a part of the Budget Control Act of 2011.

So... we're done here?

Thanks for the history lesson. We're talking about the "balanced approach" we were promised in the 2012 campaign. In Act 1, the POTUS insisted upon taxes only. Now it's time for the balancing cuts in Act 2.

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"I'll see you guys in New York." ISIS Caliph Abu Bakr al-Baghdadi to US military personnel upon his release from US custody at Camp Bucca in Iraq during Obama's first year in office.

So fiscal legislation in 2011 is too far into the distant past to even be a consideration for our current fiscal talks?

Yes, for this particular discussion it is. If that's what the President meant when he said "balanced approach", he should have said something like "we've made some significant cuts [haha], and now it's time to get down to the business increasing taxes on the American People!"

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"I'll see you guys in New York." ISIS Caliph Abu Bakr al-Baghdadi to US military personnel upon his release from US custody at Camp Bucca in Iraq during Obama's first year in office.

The Republican mantra for decades has been: cut NPR, EPA and the National Endowment for the Arts.

Now add the Pentagon to the list.

In the modern history of the Republican Party, it would have been unthinkable. The GOP is built on two core tenets — small government and big defense spending — and for decades, the two ideas co-existed peacefully. Republicans wanted to cut the federal budget — everywhere except the Pentagon. No more.

The reason: A new breed of conservatives in the House cares so much about cutting spending they’re willing to extend that to the budget for bullets and bombs, too — in this case, by letting $500 billion in across-the-board automatic budget cuts over 10 years take effect, alongside a similar number for domestic agencies.

“I’m reading what a lot of different members are saying, and I find there’s not as much opposition to sequestration as I thought there might be,” Rep. Bill Young (R-Fla.), the chairman of the House Appropriations subcommittee in charge of the Pentagon’s purse strings, told POLITICO.

“I don’t think I have any real feeling for which direction this House is going, and this is the first time in a long time that I haven’t had a pretty good feel for it,” Young added.

It’s got defense hawks in the House on edge — and on the defensive. But the members of the next generation say their argument is straightforward: Of course they want a strong national defense, but spending is spending.

“What you’re hearing from some folks about the status of the sequester simply tells you that there’s a group of Republicans who are willing to look at the Defense Department equally with the other departments,” said Rep. Mick Mulvaney (R-S.C.), a sophomore who has been leading the campaign for spending cuts, including at the Pentagon.

“I think Republicans lose credibility when they say we have to look everywhere for savings except defense,” he added.

Republican Policy Committee Chairman James Lankford of Oklahoma said sequester isn’t his first choice. He’d rather shift cuts to domestic programs, but he knows that’s an idea Senate Democrats aren’t going to swallow.

“I haven’t done the head count, but I can tell you a large part is committed to saying we have to reduce spending. We’d rather do it another way. But if the only way it can be done is sequestration, then it has to be done,” said Lankford, a sophomore who quickly rose to the top ranks of Republican leadership.

Right now, bets are on the automatic cuts taking place. It would take a dramatic, last-minute action from the White House to prevent them.

And sequestration saber rattling is loud enough that the defense industry is taking notice. Pentagon brass, who had long insisted they weren’t planning for sequestration, outlined several short-term personnel measures in case Congress doesn’t turn off the automatic cuts by the March 1 deadline, including hiring freezes, voluntary early retirements and furloughs of up to 30 days.

The reasons for the GOP’s political shift are many: America is the world’s lone superpower, with its military might unchallenged. The nation — and even some Republicans — are weary of war, as President Barack Obama wound down the involvement in Iraq and is winding down the one in Afghanistan.

But first and foremost, some of these newly elected conservatives had the backing of the tea party — whose central tenet is cutting what it sees as runaway federal spending, wherever it is, and stopping an explosion of dangerous deficits and debt.

And that’s showing up on the House floor: House GOP floor votes in recent weeks suggest Speaker John Boehner won’t be catching many breaks as he works with an unruly conference in search of big cuts on the big-ticket fiscal questions of the day, including sequestration, increasing the nation’s $16.4 trillion borrowing limit and the expiration of the continuing resolution at the end of March.

For example, 157 Republicans voted for Mulvaney’s amendment to the Hurricane Sandy relief bill that would have slashed all government spending, including the Pentagon’s, as a budget offset. (The amendment failed thanks to opposition from Democrats and 71 Republicans.)

The first House roll call of the 113th Congress — to provide $9.7 billion in flood insurance for Sandy victims — garnered 67 “no” votes. Nearly half came from freshman and sophomore Republicans.

Even defense hawks aren’t immune to registering their objections over how GOP leaders have handled the budget and tax negotiations with the Obama White House. The last-minute fiscal cliff deal that passed last month — extending George W. Bush-era tax cuts and postponing sequestration until March — won the support of just 10 of the 35 Republican members of the House Armed Services Committee.

Among House GOP lawmakers known as Pentagon stalwarts, several said they were alarmed by floor vote defections and the rhetoric from fellow Republicans. They recognize they’re the ones playing defense now on the military budget.

“There are people that think we need to cut more,” House Armed Services Committee Chairman Buck McKeon (R-Calif.) acknowledged in an interview.

McKeon said he’s been pushing back against budget hawks in the GOP conference by pointing to the nearly $600 billion in spending cuts that the Pentagon has already absorbed in recent years — and that’s before sequestration would even begin.

Even if budget hawks were to get their way, McKeon added, the sequestration cuts slated to hit the Pentagon and the rest of the federal budget in March — stretched out over a decade — won’t make a dent against the deficit.

“At a time when China is increasing their defense spending and we’re having all these hot spots and troubles around the world, I’m thinking that really people don’t all see the whole big picture and don’t understand that if you totally eliminated the Defense Department, totally eliminated federal spending on education, on transportation, on parks, on everything that we vote on, if you eliminate all discretionary budgets, we’d still be running a deficit of a half-trillion dollars a year,” he said.

But that money does make a difference for the Defense Department and its ever-changing mission, including new threats in Africa. McKeon said he’s telling Republicans that lives are at stake if the sequestration spending cuts go forward.

“The military is going to be asked to do more with less. Every time we do that, every time we cut the military back in our history going into World War II, and to Korea and to Vietnam, we lost people because we had cut back too much, and I don’t want to see that happen,” he said.

Not all House GOP freshmen say they would support voting to let the automatic Pentagon cuts as currently constituted go forward.

“Overall, we have to save money in the budget, but sequestration is not the way to do it,” said Oklahoma Rep. Jim Bridenstine, a Navy pilot and Armed Services Committee member who joined eight other Republicans last month voting against Boehner’s election as speaker. “Sequestration needs to be undone. And I’m looking forward to working on this committee to make sure that it gets undone.”

“I’d rather we manage it in more of an intelligent fashion than just say we’re cutting it,” added Rep. Brad Wenstrup (R-Ohio), an Army Reserve lieutenant colonel who served in Iraq.

But some members are ready to talk about slashing the defense budget.

“I think there’s spending that can be taken out of all departments,” said freshman Rep. Ted Yoho (R-Fla.). “And I’ve talked to people from the Pentagon. There’s just areas that, yeah, we can pull back a little more, even though they did their $470 billion already. They said it hurt, but we possibly could.”

Asked where he envisioned military cuts, Yoho replied “some of the bases may need to be relooked at.”

Obama initially signed off on sequestration figuring the Pentagon cuts would be so painful that they’d force Republicans to the bargaining table to negate them. But even that strategy has backfired because of the budget hawks.

Now, voicing support for sequestration to go forward has “become the chief threat that Republicans can employ” while Obama and Boehner spar over increasing the debt limit and government spending, said Mackenzie Eaglen, a former defense aide to Sen. Susan Collins (R-Maine) now with the conservative American Enterprise Institute.

“It makes conservatives think sequestration is the best they’ll get, therefore they’ll take it now,” she said.

“This is baked in. It’s law,” said Chris Chocola, president of the Club for Growth, the conservative advocacy group that’s been scoring Republican members on their recent spending votes.

Jim Walsh, a former New York GOP congressman who chaired an Appropriations panel responsible for the Department of Veterans Affairs, said the number of House GOP members suggesting defense cuts is unprecedented in recent history. “I never experienced that in my 20 years, even from the hawkest of the budget hawks,” he said.

Todd Harrison, a defense expert at the Center for Strategic and Budgetary Assessment, said sequestration has the added bonus of being vague enough that lawmakers who don’t try to block it could avoid taking a political hit if the across-the-board cuts end up cutting programs in their district.

“Everyone can say they don’t like it,” he said, “and still not have their fingerprints on specific cuts.”

Where do you draw the line on retroactively incorporating past events as satisfaction of current campaign promises? Most people expect campaign promises to be fulfilled after they are made. Sorry, you don't get credit for 2011.

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"I'll see you guys in New York." ISIS Caliph Abu Bakr al-Baghdadi to US military personnel upon his release from US custody at Camp Bucca in Iraq during Obama's first year in office.